Disability and Distress: The Effect of Disability Programs on Financial Outcomes

What is the relationship between disability programs and financial distress? We provide first evidence on this using several markers of distress: bankruptcy, foreclosure, eviction, home sale. Rates these adverse events peak around time application. Using variation induced by an age-based eligibility rule, we find that allowance reduces likelihood bankruptcy 20 percent, foreclosure 33 sale 15 percent. present changes reflect true reductions in distress. Considering extreme increases optimal benefit amount suggests a shorter waiting application receipt. (JEL G51, H55, J14)